The bitcoin price action is uninspiring and the chart is even worse.
The last two weeks has been a disaster in the crypto market and it might not be over yet. Friday’s big bounce from $60,000 was impressive and it came with talk about some kind of idiosyncratic liquidation, with eyes focused on Asia.
Yet despite that, bitcoin wasn’t able to get all the way back to Thursday’s opening levels. Moreover, there was a strong rebound in risk appetite yesterday including in tech stocks and it couldn’t make any headway. Now it’s underperforming today down 2.2% to $68,700.
It’s not quite at the point where I’d ring the alarm bells but if the weekend low of $67,328 cracks, it’s an ugly picture.
bitcoin 1 hour chart
In the longer term, bitcoin is back to Trump pre-election levels. There has been serious deregulation in the space since then but it hasn’t resulted in profits. Instead, it’s brought about a proliferation in scams and likely eroded trust in the space. That’s turned into something of an evil geenie where the wish is granted and it brings about ruination.
Strategy (MSTR) CEO Michael Saylor was on CNBC today downplaying the risks to its holdings of 714,644 bitcoins worth $48 billion.
“If bitcoin falls 90% for the next four years, we’ll refinance the debt,” the executive said Tuesday on CNBC’s “Squawk Box.” “We’ll just roll it forward.”
That depends on finding willing lenders and that’s hard to imagine. That said, the idea of a forced liquidation any time soon is remote.
The bigger problem for bitcoin is the lack of buyers as gold grabs headline as the alternative to dollars. We still don’t have any treasuries officially holding bitcoin as a reserve asset and the volatility remains high.
I’ll be watching carefully in the next day but the downside risks aren’t the only ones. The hourly chart above shows some consolidation and if it can break above $72,000 we can see that kind of FOMO that lifted it on Friday hit again.
